The Vigilance and Anti-Corruption Bureau (VACB) is actively tracking the suspected sleaze money trial in the alleged liquor retail incentive fraud in the Kerala State Cooperatives Consumer Federation (Consumerfed) during the 2010-15 period.
Notably, C. N. Balakrishnan, former Cooperation Minister, and Reji Nair, former managing director, Consumerfed, are among the accused in the case (VC.19/2016/SCE).
Investigators termed the suspected felony as a classic case of “accounting fraud” for financial gain.
The money paid by liquor companies to Consumerfed as sales incentive appeared not to have been factored in the organisation’s books of account. The VACB has to find out where it “vanished”.
An internal inspection in August, 2015 had pegged the “loss” to the government “due to non-accounting” of incentive payments at Rs.28.81 crore.
Investigators said the figure could be a notional one since it was calculated on the “ratio of incentive” received during earlier periods. They hinted that the “actual loss” to the exchequer could be much higher.
Contrary to the claims of the suspect officials, investigators said Consumerfed’s accounts showed that it regularly received “sales promotion” incentive from liquor companies since 2001 though it “was not in direct proportion to the sale quantity”. The incentive percentage varied “inexplicably” each year.
In its quick verification report, the VACB detailed how the incentive payments had dwindled over the years despite a whopping increase in liquor sales through Consumerfed’s 49 liquor outlets.
Tellingly, the Consumerfed received Rs.4.10 lakhs as incentive in 2015. The amount suddenly jumped to Rs.90.68 lakhs when a new managing director took over in 2016 though the increase in sale was only marginal. Investigators said the suspect officials could not explain the yawning gap in income.
The VACB said that Consumerfed “dealt” with 125 liquor companies. Fifty per cent of them were outside the State. Many had shut shop. The VACB had sent e-mails, letters and reminders to the firms to divulge the incentive/commissions paid to Consumerfed to no avail.
Investigators said they felt compelled to inspect the financial records of the companies under subpoena to fix responsibility in the case.
